Figure 1: Topic Clouds

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Figure 2: Histograms

Panel A: Dispersion of agencies per topic

Panel B: Dispersion of Topics per firm-year

\[Topic\_Dispersion_{Firm,Year} = 1 - \sum_{Topic} P^2_{Firm,Topic,year}\]

Panel C: Dispersion of Agencies per Firm-year

\[RegulationDispersion_{firm,year} = 1- \sum_{Topic} \sum_{Agency}P_{Firm,Topic,year} \cdot \omega_{Topic,Agency,year}^2 = 1 - \sum_{Topic} P_{Firm,Topic,year} \cdot HHI_{Topic,Agency}\]

Figure 3: Time Trend

Panel A: 12 Industries

Panel B: FF12 == 1

Figure 4: \(\Delta\) Regulation Dispersion

## *Panel B: Topics with biggest change around 2016 presidential election*

Panel C: Agencies the biggest \(\Delta\), Trump

Panel D: Agencies the biggest \(\Delta\), GFC

Table 1:

Table 2: Past and Future

Table 3: Descriptive statistics

Variable T1 T2 T3 T4 T5 R1 R2 R3 R4 R5
Topic Topic Topic Topic Topic Regul Regul Regul Regul Regul
Quant 0%-20% 20%-40% 40%-60% 60%-80% 80%-100% 0%-20% 20%-40% 40%-60% 60%-80% 80%-100%
# Obs. 12,108 12,107 12,107 12,107 12,108 12,108 12,107 12,107 12,107 12,108
Topic Dispersion 0.889 0.928 0.935 0.942 0.95 0.93 0.932 0.933 0.932 0.917
Regulation Dispersion 0.821 0.809 0.81 0.811 0.811 0.768 0.798 0.814 0.829 0.852
Log(Sale) 5.684 6.634 6.188 5.716 5.497 6.134 6.025 5.943 5.82 5.797
N segments 1.106 1.297 1.233 1.197 1.156 1.222 1.238 1.211 1.184 1.134
PPE/AT 0.109 0.274 0.258 0.238 0.233 0.242 0.238 0.236 0.229 0.168
EBITDA/AT 0.062 0.111 0.1 0.082 0.049 0.068 0.082 0.086 0.086 0.081
MB 2.674 3.245 3.022 3.252 3.849 3.75 3.158 3.204 3.04 2.89
Sales Growth, % 8.4 10.265 11.235 11.845 14.381 12.877 11.814 10.868 11.019 9.548
Assets Growth, % 9.359 10.285 11.618 12.608 13.774 12.864 12.042 11.083 10.526 11.128
Tobin’s Q 1.519 2.012 2.082 2.26 2.666 2.351 2.112 2.133 2.096 1.848
SGA/AT 0.091 0.25 0.292 0.334 0.375 0.24 0.265 0.286 0.304 0.245
EMP/AT 0.002 0.007 0.007 0.007 0.007 0.004 0.006 0.007 0.008 0.006
INVST/AT 0.024 0.078 0.089 0.102 0.115 0.076 0.084 0.088 0.09 0.068
ROA, % 1.824 1.671 0.215 -1.457 -4.348 -1.233 -0.186 -0.514 -0.748 0.586

Table 4 SGA_AT, TFP, ROA next year

1.lead.sga_at 2.lead.tfp 3.lead.roa 4.lead.sga_at 5.lead.tfp 6.lead.roa
Regulation Dispersion 0.381*** -0.603** -37.735*** 0.486*** -0.539* -34.069***
(0.136) (0.270) (8.301) (0.125) (0.313) (9.400)
Topic Dispersion 0.488** -0.542 -9.278 0.505** -0.685* -7.236
(0.189) (0.416) (16.646) (0.210) (0.373) (14.732)
Regulation Complexity 0.036 0.037 3.182 0.058 0.041 4.735**
(0.035) (0.062) (3.480) (0.044) (0.068) (2.335)
Log(Word,10K) -0.006 -0.014 -3.961*** -0.006 -0.015* -3.839***
(0.004) (0.009) (0.936) (0.005) (0.008) (0.918)
PPE/AT 0.083** -0.552*** -6.745*** 0.080** -0.588*** -6.432***
(0.033) (0.092) (1.698) (0.035) (0.083) (2.189)
EBITDA/AT -0.036** 1.177*** 40.224*** -0.038** 1.224*** 39.779***
(0.016) (0.079) (3.563) (0.016) (0.081) (3.711)
Log(Sale) -0.040*** 0.098*** 3.191*** -0.042*** 0.094*** 3.159***
(0.006) (0.010) (0.352) (0.007) (0.010) (0.369)
Tobin’s Q 0.013*** 0.048*** -0.480*** 0.013*** 0.049*** -0.467***
(0.001) (0.004) (0.092) (0.001) (0.005) (0.075)
Num.Obs. 60537 38925 60537 60537 38925 60537
R2 0.867 0.729 0.637 0.872 0.740 0.653
R2 Adj. 0.848 0.688 0.584 0.850 0.691 0.593
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X
FE: year X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Table 5 Sales growth, assets growth, emp next year

1.lead.growth 2.lead.growth.at 3.lead.emp_at 4.lead.growth 5.lead.growth.at 6.lead.emp_at
Regulation Dispersion -146.768*** -199.418*** 0.000 -163.501*** -193.542*** 0.004**
(25.813) (33.590) (0.005) (32.829) (37.993) (0.002)
Topic Dispersion -21.551 39.433 0.006 5.579 53.072 0.002
(38.357) (30.739) (0.005) (34.880) (35.244) (0.005)
Regulation Complexity -41.662*** -53.961*** 0.002** -44.303*** -52.366*** 0.001
(12.016) (9.018) (0.001) (10.560) (9.023) (0.001)
Log(Word,10K) 5.145*** 6.241*** 0.000* 4.595*** 5.661*** 0.000*
(1.536) (1.059) (0.000) (1.471) (1.187) (0.000)
PPE/AT -17.540*** -38.782*** 0.003*** -13.521** -35.774*** 0.003***
(4.531) (7.428) (0.001) (6.185) (9.636) (0.001)
EBITDA/AT -0.719 13.952*** 0.002*** -2.440 12.733*** 0.001***
(8.332) (3.697) (0.000) (7.830) (3.824) (0.000)
Log(Sale) 12.400*** 9.914*** 0.000 12.904*** 10.095*** 0.000
(1.111) (0.880) (0.000) (1.167) (0.921) (0.000)
Tobin’s Q 0.943*** -0.895*** 0.000*** 0.883*** -0.919*** 0.000***
(0.179) (0.228) (0.000) (0.199) (0.234) (0.000)
Num.Obs. 60537 60537 60537 60537 60537 60537
R2 0.363 0.277 0.919 0.399 0.305 0.923
R2 Adj. 0.270 0.171 0.907 0.296 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X
FE: year X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Table 6 RD: Notices, Pr. Rules, Rules

Correlation matrix between four measures of regulation dispersion (across all documents, notices, proposed rules and rules)

Panel A Correlations

Notice are less correlation with rules and proposed rules. But other things are correlated.

regul.disp regul.disp_Notice regul.disp_PRule regul.disp_Rule
regul.disp 1.0000000 0.7610614 0.7136761 0.7453047
regul.disp_Notice 0.7610614 1.0000000 0.2470057 0.2823496
regul.disp_PRule 0.7136761 0.2470057 1.0000000 0.6645406
regul.disp_Rule 0.7453047 0.2823496 0.6645406 1.0000000

Panel B Notices

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_Notice 0.414** -1.113*** 8.542 -164.691*** -180.600*** 0.004
(0.186) (0.361) (9.954) (34.905) (36.789) (0.003)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.652 0.399 0.304 0.923
R2 Adj. 0.850 0.691 0.593 0.295 0.184 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Panel C Pr Rules

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_PRule 0.398*** -0.061 -46.406*** -109.233*** -142.481*** 0.003**
(0.101) (0.194) (8.997) (25.617) (27.977) (0.002)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.653 0.399 0.305 0.923
R2 Adj. 0.850 0.691 0.594 0.296 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Panel D Rules

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_Rule 0.476*** 0.022 -65.682*** -115.378*** -137.395*** 0.005**
(0.118) (0.275) (10.627) (29.271) (31.474) (0.002)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.654 0.399 0.305 0.923
R2 Adj. 0.850 0.691 0.594 0.296 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Table 7 RD: New vs Old Rules

Correlation matrix between four measures of regulation dispersion (across all documents, notices, proposed rules and rules)

Panel A Correlations

Notice are less correlation with rules and proposed rules. But other things are correlated.

regul.disp_Rule regul.disp_RIN regul.disp_old_RIN
regul.disp_Rule 1.0000000 0.6160422 0.6772419
regul.disp_RIN 0.6160422 1.0000000 0.5382758
regul.disp_old_RIN 0.6772419 0.5382758 1.0000000

Panel B RIN

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_RIN 0.487*** -0.183 -62.065*** -104.931*** -139.175*** 0.001
(0.102) (0.160) (8.736) (27.249) (23.310) (0.003)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.654 0.399 0.305 0.923
R2 Adj. 0.850 0.691 0.594 0.295 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Panel C Old RIN

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_old_RIN 0.374*** -0.077 -45.571*** -95.487*** -126.135*** 0.005***
(0.096) (0.230) (10.668) (27.944) (29.605) (0.002)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.653 0.399 0.305 0.923
R2 Adj. 0.850 0.691 0.593 0.295 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Table 8 Lobby next year

Dependent variable: log of (1 + lobby expenses next year).

  • Average of lobby expenses next year = 749701.9 dollars

  • Average of log 1 + lobby expenses next year = 7.694968 dollars

  • standard deviation of log 1 + lobby expenses next year = 6.295143 dollars

1.lead.log_lobby 2.I(lead.lobby/10^6) 3.lead.log_lobby 4.I(lead.lobby/10^6)
Regulation Dispersion -22.301*** -6.678*** -21.617** -5.827**
(6.832) (2.255) (8.147) (2.218)
Topic Dispersion -8.688 0.647 -14.730 -2.184
(13.303) (2.980) (13.542) (2.698)
Regulation Complexity -1.971 -0.812 -2.719 -1.321*
(2.505) (0.838) (2.679) (0.769)
Log(Word,10K) 0.686** 0.107 0.441 0.058
(0.327) (0.099) (0.322) (0.109)
PPE/AT 0.163 0.013 -0.384 0.040
(0.955) (0.229) (1.053) (0.287)
EBITDA/AT -1.007** -0.420*** -0.457 -0.360***
(0.471) (0.094) (0.566) (0.124)
Log(Sale) 1.023*** 0.248*** 1.049*** 0.238***
(0.236) (0.057) (0.259) (0.073)
Tobin’s Q -0.015 -0.003 -0.038 -0.010
(0.037) (0.008) (0.039) (0.007)
Num.Obs. 14986 14986 14986 14986
R2 0.611 0.874 0.649 0.887
R2 Adj. 0.559 0.857 0.571 0.862
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X
FE: FF48 X X X X
FE: FF48_year X X
FE: year X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Table 9.Topic Groups

Panel A: 70 Topics

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_group.JK 0.570*** -0.583** -34.680*** -193.456*** -230.394*** 0.008***
(0.122) (0.285) (10.148) (34.507) (38.226) (0.003)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.653 0.399 0.305 0.923
R2 Adj. 0.850 0.691 0.593 0.296 0.185 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

Panel B: 57 Topics

lead.sga_at lead.tfp lead.roa lead.growth lead.growth.at lead.emp_at
regul.disp_group.KV 0.473*** -0.441 -24.445 -184.724*** -176.154*** 0.010**
(0.142) (0.412) (14.868) (49.103) (47.379) (0.004)
Num.Obs. 60537 38925 60537 60537 60537 60537
R2 0.872 0.740 0.653 0.399 0.304 0.923
R2 Adj. 0.850 0.691 0.593 0.295 0.184 0.910
Std. Errors Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48) Clustered (FF48)
FE: cik X X X X X X
FE: FF48 X X X X X X
FE: FF48_year X X X X X X
* p < 0.1, ** p < 0.05, *** p < 0.01

#Appendix

Table A1. Full Agency Names

agency label
commodity futures trading commission CFTC
department of agriculture USDA
department of commerce Commerce
department of energy DOE
department of health and human services DHHS
department of housing and urban developm HUD
department of interior DOI
department of justice DOJ
department of labor DOL
department of transportation Transportation
department of treasury Treasury
department of veteran affairs DVA
environmental protection agency EPA
federal communications commission FCC
federal energy regulatory commission FERC
federal reserve system FRS
international trade commission ITC
nuclear regulatory commission NRC
securities and exchange commission SEC